LONDON-The old Carat had lavish offices in Paris and London, a corporate jet, a polo team-and a reputation as a cut-rate French media broker.

After a painful financial and management overhaul, a new team led by 20-year Procter & Gamble Co. veteran Crispin Davis is reshaping the media buying group to enhance its appeal to the global marketers he wants for clients.

Mr. Davis, who became CEO of Carat's financial holding company Aegis last October, is clear about his goal: to make Carat a global brand.

"I'd like to go from [being] a French media buying company to a global [management consulting firm] McKinsey [& Co.] of the media world," Mr. Davis said.

To get there, Carat made its first move outside Europe by opening a New York office in March, and Mr. Davis is staffing up his London headquarters with marketing-savvy executives who can upgrade and expand Carat's services.

"Our business is more and more driven by international clients, who are thinking in terms of global strategy, global business, global systems and, in consequence, global suppliers," Mr. Davis said. "Four years ago, about 5% of our billings were from international clients we handled in more than three markets. Today, more than 30% are international and within the next three years I think it will be above 50%."

Mr. Davis knows what he's talking about. In his last job at United Distillers, first as regional managing director-Europe and then as group managing director, he hired Carat to buy media for the spirits marketer in Europe.

Last month he picked Pat Doble, 51, formerly global brands development director at United Distillers, for the new Carat post of group marketing director. Ms. Doble will oversee international development and upgrading and expansion of Carat's services.

Brian Jacobs, a former Leo Burnett Worldwide media director, was hired in March as media development director.

Mr. Davis said he wants to "move upstream" from basic media planning and buying services.

"That will require a greater focus on research, consumer targeting, new technology and strategic consulting capabilities," he said. "A typical European client might say, `We want you to look at our total media strategy and its application across Europe.' What should the total communications program be? Only after that do you attack the planning and buying."

The tiny new Carat North America office in New York-where an answering machine often responds to calls-is currently just a gateway to Europe to raise the company's profile among U.S. advertisers who might use Carat there.

About $1 billion of Carat's billings comes from U.S. marketers such as American Express Co., Walt Disney Co. and Philip Morris Cos., said Roger Parry, group VP-Carat North America. Other major clients include Volkswagen, Danone, Reckitt & Colman and Henkel.

"The first task in America is image building," Mr. Parry said. "Then we will think about how we become operational. How we will do it, we don't know yet."

Through September, Mr. Parry is initially sending a series of three direct-mail pieces about European media buying and Carat to marketing directors at about 750 leading U.S. companies. He also hopes to have a World Wide Web site on the Internet by yearend.

Elsewhere, Mr. Davis said Carat may appoint regional directors for Asia and Latin America in the "not too distant future."

The chairman of a rival media buying group concedes Carat is his most formidable competitor in Europe, but doubts the company will make any impact elsewhere.

In Europe, Carat has the advantage of owning the No. 1 or No. 2 media buying company in most markets, and 60% of European media buying is handled by separate media buying companies. With billings of $5.8 billion last year, Carat controls about 11% of European media buying. But in most of the rest of the world, media buying is still largely done by full-service ad agencies.

Bulk media buying was invented in Paris by Carat founder Gilbert Gross in 1966. Armed with a telephone and a little black book, he bought vast amounts of TV, newspaper and magazine space cheaply and re-sold it to clients. Carat's windfall profits came from pocketing the hefty volume discounts.

In 1988, U.K. agency group WCRS bought an initial 50% of Carat and took stakes in other European media buying companies.

Polo-playing adman Peter Scott, then chairman of rapidly diversifying WCRS, made the strategic decision to focus solely on media buying, and WCRS Group was renamed Aegis in 1990.

Aegis' costly acquisition binge of European media buying companies was followed by France's Loi Sapin in 1993, the law ending the free-wheeling media discount system that had made Carat rich. Carat lost money in 1992 and 1993 as the French market, which once accounted for 80% of Carat's profits, collapsed.

In October 1993, a debt-for-equity swap rescued the company's beleaguered finances. Last year Warburg Pincus, the venture capital group that is Aegis' largest shareholder with a 33% stake, approached Mr. Davis about taking the CEO's job. He has slashed costs and staff and is moving the company to more modest London and Paris offices.

"The company's had a roller coaster ride, and its reputation has been dragged through the mud" in the financial community, Mr. Davis said. "There was an issue of credibility."

Goldman Sachs cautiously describes Aegis as "starting to look better" in a recent research report that rates the company as outperforming the market but still a higher than average risk investment.

"The changes at the top of the company are welcome because management must rebuild shareholders' confidence," said David Forster, an analyst at London stockbroker Smith New Court.

Besides honing a leaner Paris operation to cope with a less profitable French market, Mr. Davis and his team are rebuilding Carat's operation in Spain.

Billings there sank to $654 million in 1994-down 7% from 1993 and a 20.7% drop from 1992, reflecting awful local financial controls and bad debts from high-risk clients that have since been jettisoned.

After the years of breakneck growth followed by financial hardship, Carat's CEO repeatedly stresses that his expansion goals for the company are long-term.

"Europe is less than 40% of total world [media] expenditure," Mr. Davis said. "We're well-placed to look at the 60% of the world we're not competing in."

Joe Mandese contributed to this story.

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Carat at a glance

Headquarters: London

1994 results: Pre-tax profits of $32 million on billings of $5.8 billion.

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Laurel Wentz

Laurel Wentz is Ad Age's Global and Multicultural Editor, responsible for international and U.S. Hispanic coverage. She is based in New York. She previously covered Europe from Ad Age's London bureau, and before that was Latin America editor, based in Sao Paulo. The best way to reach Laurel is by email at [email protected]